So yesterday I enter DRYS at 1.16 with a tight stop at 1.09. So
DRYS is treading water fro most of the day and toward the end hits
my stop. Today it just shoots, up 15-20%. What have I done wrong?
What is a good stop? Any suggestions to avoid next time this type
of whipsaw action? Regrets now are the core but some advice might
help with the pain.
Posted by manson805 on 15th of May 2009 at 11:17 am
Drys is trading perfectly between the 20 and 50 day MAs.
Currently it's at the 20 MA resistance and found support yesterday
at the 50 day MA. Place your stops under the significant moving
averages.
Posted by padraigm on 15th of May 2009 at 11:19 am
That is a tight stop. Everyone is different but I usually allow
4 to 8% depending on the volatility of the stock. You had a 1%
stop. If it was intended to be a day trade no problem. if you
expected to hold it for a few days or more a wider stop is
appropriate.
Pat
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What I did wrong
Posted by hbrian on 15th of May 2009 at 11:06 am
So yesterday I enter DRYS at 1.16 with a tight stop at 1.09. So DRYS is treading water fro most of the day and toward the end hits my stop. Today it just shoots, up 15-20%. What have I done wrong? What is a good stop? Any suggestions to avoid next time this type of whipsaw action? Regrets now are the core but some advice might help with the pain.
Thanks,
BH
20 and 50 day MAs
Posted by manson805 on 15th of May 2009 at 11:17 am
Drys is trading perfectly between the 20 and 50 day MAs. Currently it's at the 20 MA resistance and found support yesterday at the 50 day MA. Place your stops under the significant moving averages.
Thanks for educating me. Gratefull
Posted by hbrian on 15th of May 2009 at 11:20 am
Thanks for educating me. Gratefull that somebody is assisting!
Sorry was 6.16 in and
Posted by hbrian on 15th of May 2009 at 11:10 am
Sorry was 6.16 in and 6.09 out!
That is a tight stop.
Posted by padraigm on 15th of May 2009 at 11:19 am
That is a tight stop. Everyone is different but I usually allow 4 to 8% depending on the volatility of the stock. You had a 1% stop. If it was intended to be a day trade no problem. if you expected to hold it for a few days or more a wider stop is appropriate.
Pat